Holders of credit insurance linked to Credit Suisse bonds will not get a payout after a committee that adjudicates on disputes in the derivatives market said on Wednesday the bank’s state-engineered merger with UBS was not a credit event.
The Swiss bank in March was taken over by UBS in a state-assisted rescue deal that wiped out Credit Suisse’s $17 billion Additional Tier 1 (AT1) bondholders.
“A Governmental Intervention Credit Event had not occurred,” the EMEA Credit Derivatives Determination Committee (CDDC) said in a statement on its website, responding to a question from an investor last week.
The CDDC said it had come to the conclusion following an examination of the ranking clauses for the AT1 bonds listed in the request made by the investor.
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